2007 04 06 163146 Chapter 7 1

956 WordsNov 21, 20144 Pages
E7-2 (Determine Cash Balance) Presented below are a number of independent situations. Instructions For each individual situation, determine the amount that should be reported as cash. 1.Checking account balance $925,000; certificate of deposit $1,400,000; cash advance to subsidiary of $980,000; utility deposit paid to gas company $180. $ 2,325,000 Cash balance of $925,000. Only the checking account balance should be reported as cash. The certificates of deposit should be reported as a temporary investment, the cash advance to subsidiary should be reported as accounts receivable, and the utility deposit should be identified as a receivable from the gas company. 2.Checking account balance $600,000; an overdraft in special…show more content…
1. Beginning-of-the-year Accounts Receivable balance was $15,000. 2. Net sales (all on account) for the year were $100,000. Jones does not offer cash discounts. 3. Collections on accounts receivable during the year were $70,000. Instructions (a) Prepare (summary) journal entries to record the items noted above. DescriptionDebitCredit Account Receivable100,000 Sales 100,000 Cash70,000 Account Receivable70,000 Accounts Receivable $100,000 Sales $100,000 Cash $70,000 Accounts Receivable $70,000 (b) Compute Jones' accounts receivable turnover ratio for the year. The company does not believe it will have any bad debts. (Round answer to 2 decimal places.) (4.44) times Accounts Receivable Turnover = Sales / Average Receivables Beginning Accounts Receivable = $15,000 Add: Sales $100,000 Total Receivables $115,000 Less: Cash Receipts $70,000

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